Ever since Alpha Minerals’ November 2012 discovery, other explorers have basked in Patterson Lake South’s reflected glory. Now Fission Uranium TSX:FCU has plans that could further boost its own fortunes while complementing others. A proposed new mill would create a potential “key centrepiece for the western Athabasca Basin—with the potential to process ore from other high-grade projects in the region as they are taken into production,” says president/COO Ross McElroy. That’s one of the highlights of the preliminary economic assessment announced September 3 for the Triple R deposit’s proposed open-pit/underground mine and mill.

The numbers look good, especially with average operating costs of US$14.02 per pound U3O8 over a 14-year lifespan, “making Triple R potentially one of the lowest-cost uranium producers in the world,” Fission boasted.

Taking less than three years from discovery to PEA, Patterson Lake South encouraged a busy area play around the southwestern Basin.

Those numbers, however, assume a substantial uranium price recovery to US$65 a pound and a continually weak northern peso floundering at US$0.85.

Using a 10% discount rate, the figures show a post-tax net present value of $1.02 billion (all dollar figures Canadian, except where noted) and a 34.2% post-tax internal rate of return.

The study estimates initial capital costs at $1.1 billion, with a prompt post-tax payback in 1.7 years.

The high-grade deposit would produce around 100.8 million pounds of U3O8 with 95% metallurgical recovery, bringing 77.5 million pounds in the operation’s first six years and another 24 million pounds over the following eight years. Annual production would average 7.2 million pounds over 14 years.

The study updates Triple R’s maiden resource but doesn’t include the recently expanded R600W zone to the west. The resource used a 0.2% open pit cutoff and 0.25% underground cutoff for a total of:

Triple R takes in two zones, the land-based R00E and the much larger R780E, lying 225 metres east under about six metres of water.

Those numbers, however, assume a substantial uranium price recovery to US$65 a pound and a continually weak northern peso floundering at US$0.85.

The PEA attributes its low opex partly to an open pit/underground design taking advantage of the big but shallow, high-grade, basement-hosted deposit. The hybrid mine would feature dykes and slurry walls for water control. “High-grade mineralization (above 4% U3O8) is captured within the open pit, eliminating the need for expensive, specialized underground mining methods.”

The design would use “proven techniques successfully implemented at a number of Canadian mining operations, including the Diavik diamond mine and the Meadowbank gold mine,” the PEA states. “The development scenario does not require any new, untested, conceptual mining or construction methods.”

In other words, it’s not another Cigar Lake. The study foresees about three years of pre-production.

The open pit would produce a total of 1.56 million tonnes averaging 2.21%, while the underground portion would come to 3.25 million tonnes averaging 0.42%. Total production would hit 4.8 million tonnes at 1%.

Of course the proposed new mill, not to mention McElroy’s buoyant remarks, will be welcomed by the region’s other explorers, most notably NexGen Energy TSXV:NXE but also including several earlier-stage projects.

The PEA announcement precedes closure of Fission’s proposed merger with Denison Mines TSX:DML, which the companies anticipate next month. Initial reaction to the merger from Fission shareholders, however, was less than enthusiastic. The deal requires their two-thirds support, as well as 50% plus one from Denison owners. Could such an encouraging PEA bolster the resistance of some Fission voters?

The suitors have mentioned that Denison’s connection with the Lundin Group brings access to mining expertise. But they’ve also left open the possibility of selling part or all of their combined portfolio. In a corporate video released prior to the PEA, CEO/chairperson Dev Randhawa said, “You do not have to be a uranium company to mine this.”